Anglo African Ag PLC Update on the Comarco transaction and COVID-19
May 11 2020 - 1:00AM
UK Regulatory
TIDMAAAP
The information contained within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulations (EU) No.
596/2014. Upon the publication of this announcement, this inside information is
now considered to be in the public domain.
11 May 2020
Anglo African Agriculture Plc
("AAA" or the "Company")
Update on the Comarco transaction and COVID-19
The Board of AAA today issues an update on its existing operations in the
current Coronavirus environment and progress on the proposed Reverse Takeover
of the Comarco group of companies (the "Comarco Transaction").
We are pleased to report that the Company's trading subsidiary, Dynamic
Intertrade ("DI"), is fully operational despite the Coronavirus lockdown in
South Africa. As a food manufacturer DI is an essential manufacturer under
South African regulations. In addition, all staff working at DI have always
kept to an extremely high standard of hygiene as dictated by FSSC requirements
and worn masks and protective clothing ensuring safety of employees and
products. Although DI is trading in a difficult environment it is still
supplying to its major customers and production is continuing at a pace. It is
expected, based on indicative orders, that for the six months ending 31 October
2020, that revenues will be almost double the corresponding period in the
previous year. One of the major customers recently issued a six-month
production order amounting to some US$1m starting July this year. Although the
indicative orders look positive, due to the uncertainties caused by the
Coronavirus the company cannot give future guidance year on year.
Progress with the Comarco Transaction has been protracted, mainly due to the
general capital markets environment and the fact that many investment decisions
have been put on hold until the effects of the Coronavirus are understood.
Comarco as a Port and Marine logistics operator is currently not materially
affected by Coronavirus, however there is a slow down as with all trade
worldwide. Activity on the Mozambique LNG project has also slowed down due to
contractors not been able to travel and a general 30-day lockdown in
Mozambique.
The parties are in the process of documenting an extension of the longstop date
to 31 August 2020. Given that the futures of both Comarco and AAA are closely
related, it is the companies' shared belief that the current delay will not
change the long-term outcome. As announced on 31 December 2019, one option
being evaluated is to accept investors at asset level in the Port and to then
complete the RTO of Comarco group into AAA. The Company is also considering
initiatives to jointly build a marine logistics division within AAA using an
organic route with the help of Comarco. This would allow us to grow AAA, give
exposure to a high growth business and create more free cash flow.
The $1million loan ("Loan") the Company advanced to Comarco will have a
repayment value of approx. $1.3million (GBP1.1million) and is repayable on 12
November 2020. The Company has security to cover the Loan, being an option to
acquire, for nominal consideration, the shares of Touchwood Investments
Limited. Touchwood's major asset is a 4.75 acre area of land at the Comarco
port which Knight Frank in Kenya recently valued at $12million The Company
also received permission from the holder of the GBP250,000 convertible loan notes
which AAA issued as part of that financing to defer the remaining interest into
a capital repayment.
The Company and its advisors are currently working on the above initiatives and
will update the market in due course.
The Board remains confident of the future for the Company despite the current
global environment which is affecting so many companies.
For further information, please visit www.aaaplc.com or www.comarcogroup.com
contact the following:
Anglo African Agriculture Plc
David Lenigas, Non-Executive Chairman +44 (0) 20 7440 0640
Rob Scott, Executive Director +27 (0)84 6006 001
Comarco Group +27 (0)82 6191 081
Simon Phillips (Chief Executive) +44 (0)77 8811 4411
Charlie Pettifer
VSA Capital Limited (Financial Adviser and +44 (0)20 3005 5000
Corporate Broker)
Andrew Monk (Corporate Broking)
Andrew Raca, Maciek Szymanski (Corporate Finance)
END
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